49–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 114–17 

CONSERVATION EASEMENT INCENTIVE ACT OF 2015 

FEBRUARY 9, 2015.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. RYAN of Wisconsin, from the Committee on Ways and Means, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 641] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Ways and Means, to whom was referred the 

bill (H.R. 641) to amend the Internal Revenue Code of 1986 to 

make permanent the special rule for contributions of qualified conservation contributions, having considered the same, report favorably thereon with an amendment and recommend that the bill as 

amended do pass. 

CONTENTS 

Page 

I. SUMMARY AND BACKGROUND ............................................................... 2 

A. Purpose and Summary ..................................................................... 2 

B. Background and Need for Legislation ............................................. 3 

C. Legislative History ............................................................................ 3 

II. EXPLANATION OF THE BILL ................................................................... 4 

A. Special Rule for Qualified Conservation Contributions Made 

Permanent (sec. 170(b) of the Code) ............................................. 4 

III. VOTES OF THE COMMITTEE .................................................................... 7 

IV. BUDGET EFFECTS OF THE BILL ............................................................ 8 

A. Committee Estimate of Budgetary Effects ...................................... 8 

B. Statement Regarding New Budget Authority and Tax Expenditures Budget Authority .................................................................. 8 

C. Cost Estimate Prepared by the Congressional Budget Office ....... 8 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF 

THE HOUSE .............................................................................................. 10 

A. Committee Oversight Findings and Recommendations ................. 10 

B. Statement of General Performance Goals and Objectives ............. 10 


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C. Information Relating to Unfunded Mandates ................................ 10 

D. Applicability of House Rule XXI 5(b) .............................................. 10 

E. Tax Complexity Analysis .................................................................. 10 

F. Congressional Earmarks, Limited Tax Benefits, and Limited 

Tariff Benefits ................................................................................. 11 

G. Duplication of Federal Programs ..................................................... 11 

H. Disclosure of Directed Rule Makings .............................................. 11 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED 11 

VII. DISSENTING VIEWS ................................................................................... 44 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Conservation Easement Incentive Act of 2015’’. 

SEC. 2. SPECIAL RULE FOR QUALIFIED CONSERVATION CONTRIBUTIONS MADE PERMANENT. 

(a) IN GENERAL.— 

(1) INDIVIDUALS.—Subparagraph (E) of section 170(b)(1) of the Internal Revenue Code of 1986 (relating to contributions of qualified conservation contributions) is amended by striking clause (vi). 

(2) CORPORATIONS.—Subparagraph (B) of section 170(b)(2) of such Code (relating to qualified conservation contributions) is amended by striking clause (iii). 

(b) CONTRIBUTIONS OF CAPITAL GAIN REAL PROPERTY MADE FOR CONSERVATION

PURPOSES BY NATIVE CORPORATIONS.— 

(1) IN GENERAL.—Section 170(b)(2) of such Code is amended by redesignating 

subparagraph (C) as subparagraph (D), and by inserting after subparagraph (B) 

the following new subparagraph: 

‘‘(C) QUALIFIED CONSERVATION CONTRIBUTIONS BY CERTAIN NATIVE CORPORATIONS.— 

‘‘(i) IN GENERAL.—Any qualified conservation contribution (as defined 

in subsection (h)(1)) which— 

‘‘(I) is made by a Native Corporation, and 

‘‘(II) is a contribution of property which was land conveyed under 

the Alaska Native Claims Settlement Act, 

shall be allowed to the extent that the aggregate amount of such contributions does not exceed the excess of the taxpayer’s taxable income 

over the amount of charitable contributions allowable under subparagraph (A). 

‘‘(ii) CARRYOVER.—If the aggregate amount of contributions described 

in clause (i) exceeds the limitation of clause (i), such excess shall be 

treated (in a manner consistent with the rules of subsection (d)(2)) as 

a charitable contribution to which clause (i) applies in each of the 15 

succeeding taxable years in order of time. 

‘‘(iii) NATIVE CORPORATION.—For purposes of this subparagraph, the 

term ‘Native Corporation’ has the meaning given such term by section 

3(m) of the Alaska Native Claims Settlement Act.’’. 

(2) CONFORMING AMENDMENTS.— 

(A) Section 170(b)(2)(A) of such Code is amended by striking ‘‘subparagraph (B) applies’’ and inserting ‘‘subparagraph (B) or (C) applies’’. 

(B) Section 170(b)(2)(B)(ii) of such Code is amended by striking ‘‘15 succeeding years’’ and inserting ‘‘15 succeeding taxable years’’. 

(3) VALID EXISTING RIGHTS PRESERVED.—Nothing in this subsection (or any 

amendment made by this subsection) shall be construed to modify the existing 

property rights validly conveyed to Native Corporations (within the meaning of 

section 3(m) of the Alaska Native Claims Settlement Act) under such Act. 

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to contributions made in taxable years beginning after December 31, 2014. 

I. SUMMARY AND BACKGROUND 

A. PURPOSE AND SUMMARY

H.R. 641, reported by the Committee on Ways and Means, provides that individuals may deduct the fair market value of qualified conservation contributions up to 50 percent of the individual’s 

adjusted gross income (AGI). H.R. 641 provides that farmers and 

ranchers may deduct the fair market value of qualified conservaVerDate Sep 11 2014 11:53 Feb 10, 2015 Jkt 049006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR017.XXX HR017

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tion contributions up to 100 percent of AGI (or 100 percent of taxable income in the case of a corporate farmer or rancher), provided 

the property used in agricultural or livestock production remains 

available for such production. An identical, temporary provision expired for taxable years beginning after December 31, 2014. The bill 

also permits Alaska Native Corporations to deduct donations of 

conservation easements up to 100 percent of taxable income, effective for qualified conservation contributions made after 2014. 

B. BACKGROUND AND NEED FOR LEGISLATION

While the Committee continues actively to pursue comprehensive 

tax reform as a critical means of promoting economic growth and 

job creation, the Committee also believes that it is important to 

provide individuals and small businesses permanent, immediate 

tax relief to encourage faster economic growth and job creation, 

while fostering charitable giving. By reinstating and making permanent the increased deduction limits for qualified conservation 

contributions, H.R. 641 restores an important incentive for contributions of conservation easements for the benefit of the nation’s 

communities and the environment. The deduction for qualified conservation contributions was intended to spur new donations of conservation easements. According to testimony received by the Committee, in the first two years following its original enactment, the 

temporary rule doubled the number of conservation easement donations in comparison to the two prior years, and increased the acreage conserved by about 32 percent. H.R. 641, will continue these 

results by providing certainty and stability to individuals and businesses seeking to contribute conservation easements. 

C. LEGISLATIVE HISTORY

Background 

H.R. 641 was introduced on February 2, 2015, and was referred 

to the Committee on Ways and Means. 

Committee action 

The Committee on Ways and Means marked up H.R. 641, the 

Conservation Easement Incentive Act of 2015, on February 4, 2015, 

and ordered the bill, as amended, favorably reported (with a 

quorum being present). 

Committee hearings 

The need for permanent rules regarding qualified conservation 

contributions was discussed at no fewer than three hearings during 

the 112th and 113th Congresses: 

• Select Revenue Measures Subcommittee Hearing on Certain Expiring Tax Provisions (April 26, 2012); 

• Select Revenue Measures Subcommittee Hearing on 

Framework for Evaluating Certain Expiring Tax Provisions 

(June 8, 2012); and 

• Full Committee Hearing on Tax Reform and Charitable 

Contributions (February 14, 2013). 


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1Secs. 170, 2055, and 2522, respectively. 

II. EXPLANATION OF THE BILL 

A. SPECIAL RULE FOR QUALIFIED CONSERVATION CONTRIBUTIONS

MADE PERMANENT (SEC. 170(B) OF THE CODE) 

PRESENT LAW

Charitable contributions generally 

In general, a deduction is permitted for charitable contributions, 

subject to certain limitations that depend on the type of taxpayer, 

the property contributed, and the donee organization. The amount 

of deduction generally equals the fair market value of the contributed property on the date of the contribution. Charitable deductions are provided for income, estate, and gift tax purposes.1

In general, in any taxable year, charitable contributions by a corporation are not deductible to the extent the aggregate contributions exceed ten percent of the corporation’s taxable income computed without regard to net operating or capital loss carrybacks. 

Total deductible contributions of an individual taxpayer to public 

charities, private operating foundations, and certain types of private nonoperating foundations generally may not exceed 50 percent 

of the taxpayer’s contribution base, which is the taxpayer’s adjusted gross income for a taxable year (disregarding any net operating loss carryback). To the extent a taxpayer has not exceeded 

the 50-percent limitation, (1) contributions of capital gain property 

to public charities generally may be deducted up to 30 percent of 

the taxpayer’s contribution base, (2) contributions of cash to most 

private nonoperating foundations and certain other charitable organizations generally may be deducted up to 30 percent of the taxpayer’s contribution base, and (3) contributions of capital gain 

property to private foundations and certain other charitable organizations generally may be deducted up to 20 percent of the taxpayer’s contribution base. 

Contributions in excess of the applicable percentage limits generally may be carried over and deducted over the next five taxable 

years, subject to the relevant percentage limitations on the deduction in each of those years. 

Capital gain property 

Capital gain property means any capital asset or property used 

in the taxpayer’s trade or business the sale of which at its fair market value, at the time of contribution, would have resulted in gain 

that would have been long-term capital gain. Contributions of capital gain property to a qualified charity are deductible at fair market value within certain limitations. Contributions of capital gain 

property to charitable organizations described in section 

170(b)(1)(A) (e.g., public charities, private foundations other than 

private non-operating foundations, and certain governmental units) 

generally are deductible up to 30 percent of the taxpayer’s contribution base. An individual may elect, however, to bring all these 

contributions of capital gain property for a taxable year within the 

50-percent limitation category by reducing the amount of the contribution deduction by the amount of the appreciation in the capital 

gain property. Contributions of capital gain property to charitable 


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2Secs. 170(f)(3)(B)(iii) and 170(h). 

3Sec. 170(b)(1)(E). 

organizations described in section 170(b)(1)(B) (e.g., private non-operating foundations) are deductible up to 20 percent of the taxpayer’s contribution base. 

For purposes of determining whether a taxpayer’s aggregate 

charitable contributions in a taxable year exceed the applicable 

percentage limitation, contributions of capital gain property are 

taken into account after other charitable contributions. 

Qualified conservation contributions 

Qualified conservation contributions are one exception to the 

‘‘partial interest’’ rule, which generally bars deductions for charitable contributions of partial interests in property.2 A qualified conservation contribution is a contribution of a qualified real property 

interest to a qualified organization exclusively for conservation purposes. A qualified real property interest is defined as: (1) the entire 

interest of the donor other than a qualified mineral interest; (2) a 

remainder interest; or (3) a restriction (granted in perpetuity) on 

the use that may be made of the real property. Qualified organizations include certain governmental units, public charities that meet 

certain public support tests, and certain supporting organizations. 

Conservation purposes include: (1) the preservation of land areas 

for outdoor recreation by, or for the education of, the general public; (2) the protection of a relatively natural habitat of fish, wildlife, 

or plants, or similar ecosystem; (3) the preservation of open space 

(including farmland and forest land) where such preservation will 

yield a significant public benefit and is either for the scenic enjoyment of the general public or pursuant to a clearly delineated Federal, State, or local governmental conservation policy; and (4) the 

preservation of an historically important land area or a certified 

historic structure. 

Qualified conservation contributions of capital gain property are 

subject to the same limitations and carryover rules as other charitable contributions of capital gain property. 

Temporary rules regarding contributions of capital gain real property for conservation purposes 

In general 

Under a temporary provision 3 the 30-percent contribution base 

limitation on deductions for contributions of capital gain property 

by individuals does not apply to qualified conservation contributions (as defined under present law). Instead, individuals may deduct the fair market value of any qualified conservation contribution to the extent of the excess of 50 percent of the contribution 

base over the amount of all other allowable charitable contributions. These contributions are not taken into account in determining the amount of other allowable charitable contributions. 

Individuals are allowed to carry over any qualified conservation 

contributions that exceed the 50-percent limitation for up to 15 

years. 

For example, assume an individual with a contribution base of 

$100 makes a qualified conservation contribution of property with 

a fair market value of $80 and makes other charitable contribuVerDate Sep 11 2014 11:53 Feb 10, 2015 Jkt 049006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR017.XXX HR017

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4Sec. 170(b)(2)(B). 

5Secs. 170(b)(1)(E)(vi) and 170(b)(2)(B)(iii). 

tions subject to the 50-percent limitation of $60. The individual is 

allowed a deduction of $50 in the current taxable year for the nonconservation contributions (50 percent of the $100 contribution 

base) and is allowed to carry over the excess $10 for up to 5 years. 

No current deduction is allowed for the qualified conservation contribution, but the entire $80 qualified conservation contribution 

may be carried forward for up to 15 years. 

Farmers and ranchers 

In the case of an individual who is a qualified farmer or rancher 

for the taxable year in which the contribution is made, a qualified 

conservation contribution is deductible up to 100 percent of the excess of the taxpayer’s contribution base over the amount of all 

other allowable charitable contributions. 

In the above example, if the individual is a qualified farmer or rancher, in addition to the $50 deduction for non-conservation contributions, an additional $50 for the qualified conservation contribution is allowed and $30 may be carried forward for up to 15 

years as a contribution subject to the 100-percent limitation. 

In the case of a corporation (other than a publicly traded corporation) that is a qualified farmer or rancher for the taxable year in 

which the contribution is made, any qualified conservation contribution is deductible up to 100 percent of the excess of the corporation’s taxable income (as computed under section 170(b)(2)) 

over the amount of all other allowable charitable contributions. 

Any excess may be carried forward for up to 15 years as a contribution subject to the 100-percent limitation.4

As an additional condition of eligibility for the 100-percent limitation, with respect to any contribution of property in agriculture 

or livestock production, or that is available for such production, by 

a qualified farmer or rancher, the qualified real property interest 

must include a restriction that the property remain generally available for such production. (There is no requirement as to any specific use in agriculture or farming, or necessarily that the property 

be used for such purposes, merely that the property remain available for such purposes.) 

A qualified farmer or rancher means a taxpayer whose gross income from the trade or business of farming (within the meaning of 

section 2032A(e)(5)) is greater than 50 percent of the taxpayer’s 

gross income for the taxable year. 

Termination 

The temporary rules regarding contributions of capital gain real 

property for conservation purposes do not apply to contributions 

made in taxable years beginning after December 31, 2014.5

REASONS FOR CHANGE

The Committee believes that the special rule that provides an increased incentive to make charitable contributions of partial interests in real property for conservation purposes is an important way 

of encouraging conservation and preservation, and therefore should 

be permanently extended. 


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6 43 U.S.C. sec. 1602(m) (providing that the term Native Corporation includes ‘‘any Regional 

Corporation, any Village Corporation, any Urban Corporation, and any Group Corporation,’’ as 

those terms are defined under the Alaska Native Claims Settlement Act). 

EXPLANATION OF PROVISION

The provision reinstates and makes permanent the increased 

percentage limits and extended carryforward period for qualified 

conservation contributions. 

The provision also includes special rules for qualified conservation contributions by certain Native Corporations. For this purpose, 

the term Native Corporation has the meaning given such term by 

section 3(m) of the Alaska Native Claims Settlement Act.6 In the 

case of any qualified conservation contribution which is made by a 

Native Corporation and is a contribution of property that was land 

conveyed under the Alaska Native Claims Settlement Act, a deduction for the contribution is allowed to the extent that the aggregate 

amount of such contributions does not exceed the excess of 100 percent of the taxpayer’s taxable income over the amount of all other 

allowable charitable contributions. Any excess may be carried forward for up to 15 years as a contribution subject to the 100-percent 

limitation. The provision shall not be construed to modify the existing property rights validly conveyed to Native Corporations under 

the Alaska Native Claims Settlement Act. 

EFFECTIVE DATE

The provision applies to contributions made in taxable years beginning after December 31, 2014. 

III. VOTES OF THE COMMITTEE 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the following statements are made concerning the votes of the Committee on Ways and Means in its consideration of H.R. 641, the Conservation Easement Incentive Act of 

2015, on February 4, 2015. 

The bill H.R. 641 was ordered favorably reported as amended by 

a roll call vote of 24 yeas to 14 nays (with a quorum being present). 

The vote was as follows: 

Representative Yea Nay Present Representative Yea Nay Present 

Mr. Ryan ............................... X ........... ............. Mr. Levin .............................. ........... X .............

Mr. Johnson ........................... X ........... ............. Mr. Rangel ........................... ........... X .............

Mr. Brady .............................. X ........... ............. Mr. McDermott ..................... ........... X .............

Mr. Nunes ............................. X ........... ............. Mr. Lewis .............................. ........... X .............

Mr. Tiberi .............................. X ........... ............. Mr. Neal ............................... ........... X .............

Mr. Reichert .......................... X ........... ............. Mr. Becerra .......................... ........... X .............

Mr. Boustany ......................... X ........... ............. Mr. Doggett .......................... ........... X .............

Mr. Roskam ........................... X ........... ............. Mr. Thompson ...................... ........... X .............

Mr. Price ............................... X ........... ............. Mr. Larson ............................ ........... X .............

Mr. Buchanan ....................... X ........... ............. Mr. Blumenauer ................... ........... ........... .............

Mr. Smith (NE) ...................... X ........... ............. Mr. Kind ............................... ........... X .............

Mr. Schock ............................ X ........... ............. Mr. Pascrell .......................... ........... X .............

Ms. Jenkins ........................... X ........... ............. Mr. Crowley .......................... ........... X .............

Mr. Paulsen ........................... X ........... ............. Mr. Davis .............................. ........... X .............

Mr. Marchant ........................ X ........... ............. Ms. Sanchez ......................... ........... X .............

Ms. Black .............................. X ........... .............

Mr. Reed ............................... X ........... .............

Mr. Young ............................. X ........... .............

Mr. Kelly ................................ X ........... .............

Mr. Renacci ........................... X ........... .............


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Representative Yea Nay Present Representative Yea Nay Present 

Mr. Meehan ........................... X ........... .............

Ms. Noem .............................. X ........... .............

Mr. Holding ........................... X ........... .............

Mr. Smith (MO) ..................... X ........... .............

IV. BUDGET EFFECTS OF THE BILL 

A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS

In compliance with clause 3(d) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the effects on the budget of the bill, H.R. 641, as reported. 

The bill, as reported, is estimated to have the following effect on 

Federal budget receipts for fiscal years 2015–2025: 

FISCAL YEARS 

[Millions of Dollars] 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015– 

20 

2015– 

25 

¥25 ¥73 ¥86 ¥90 ¥94 ¥103 ¥120 ¥136 ¥150 ¥164 ¥178 ¥470 ¥1,220 

NOTE: Details do not add to totals due to rounding. 

Pursuant to clause 8 of rule XIII of the Rules of the House of 

Representatives, the following statement is made by the Joint Committee on Taxation with respect to the provisions of the bill amending the Internal Revenue Code of 1986: the gross budgetary effect 

(before incorporating macroeconomic effects) in any fiscal year is 

less than 0.25 percent of the current projected gross domestic product of the United States for that fiscal year; therefore, the bill is 

not ‘‘major legislation’’ for purposes of requiring that the estimate 

include the budgetary effects of changes in economic output, employment, capital stock and other macroeconomic variables. 

B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX

EXPENDITURES BUDGET AUTHORITY

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee states that the bill involves no new or increased budget authority. The Committee further states that the revenue-reducing tax provisions involve increased tax expenditures. (See amounts in table in Part IV.A., 

above.) 

C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET

OFFICE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, requiring a cost estimate prepared by 

the CBO, the following statement by CBO is provided. 


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CONGRESSIONAL BUDGET OFFICE

U.S. CONGRESS

Washington, DC, February 5, 2015. 

Hon. PAUL RYAN, 

Chairman, Committee on Ways and Means, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 641, the Conservation 

Easement Incentive Act of 2015. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Nate Frentz. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

H.R. 641—Conservation Easement Incentive Act of 2015 

H.R. 641 would amend the Internal Revenue Code to reinstate 

and make permanent specified rules that increased the amount of 

income tax deductions allowed for taxpayers making certain charitable contributions of real property for conservation purposes. The 

rules, which expired on December 31, 2014, increased certain income-based limits on the amount of such conservation contributions 

that an individual or qualified corporate farmer or rancher could 

deduct in a year, and extended the number of years over which 

such contributions above the limits could be carried forward and 

deducted. H.R. 641 also includes special rules for qualified conservation contributions made by Alaska Native Corporations. 

The staff of the Joint Committee on Taxation (JCT) estimates 

that enacting H.R. 641 would reduce revenues, thus increasing federal budget deficits, by about $1.2 billion over the 2015–2025 period. 

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct 

spending and revenues. Enacting H.R. 641 would result in revenue 

losses in each year beginning in 2015. The estimated increases in 

the deficit are shown in the following table. 

JCT has determined that the bill contains no intergovernmental 

or private-sector mandates as defined in the Unfunded Mandates 

Reform Act. 

The CBO staff contact for this estimate is Nathaniel Frentz. The 

estimate was approved by David Weiner, Assistant Director for Tax 

Analysis. 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 641, AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON WAYS AND MEANS ON FEBRUARY 4, 2015 

By fiscal year, in millions of dollars— 

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2015– 

2020 

2015– 

2025 

NET INCREASE IN THE DEFICIT 

Statutory Pay-AsYou-Go Impact 25 73 86 90 94 103 120 136 150 164 178 470 1,220 

Source: Staff of the Joint Committee on Taxation. 

Note: Components may not sum to totals because of rounding. 


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V. OTHER MATTERS TO BE DISCUSSED UNDER THE 

RULES OF THE HOUSE 

A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

With respect to clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives (relating to oversight findings), the Committee advises that it was as a result of the Committee’s review of 

the provisions of H.R. 641 that the Committee concluded that it is 

appropriate to report the bill, as amended, favorably to the House 

of Representatives with the recommendation that the bill do pass. 

B. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

With respect to clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the bill contains no measure that authorizes funding, so no statement of general performance goals and objectives for which any measure authorizes funding is required. 

C. INFORMATION RELATING TO UNFUNDED MANDATES

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104–4). 

The Committee has determined that the bill does not contain 

Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental 

mandate on State, local, or tribal governments. 

D. APPLICABILITY OF HOUSE RULE XXI 5(B) 

Rule XXI 5(b) of the Rules of the House of Representatives provides, in part, that ‘‘A bill or joint resolution, amendment, or conference report carrying a Federal income tax rate increase may not 

be considered as passed or agreed to unless so determined by a 

vote of not less than three-fifths of the Members voting, a quorum 

being present.’’ The Committee has carefully reviewed the bill, and 

states that the bill does not involve any Federal income tax rate 

increases within the meaning of the rule. 

E. TAX COMPLEXITY ANALYSIS

Section 4022(b) of the Internal Revenue Service Restructuring 

and Reform Act of 1998 (the ‘‘IRS Reform Act’’) requires the staff 

of the Joint Committee on Taxation (in consultation with the Internal Revenue Service and the Treasury Department) to provide a 

tax complexity analysis. The complexity analysis is required for all 

legislation reported by the Senate Committee on Finance, the 

House Committee on Ways and Means, or any committee of conference if the legislation includes a provision that directly or indirectly amends the Internal Revenue Code and has widespread applicability to individuals or small businesses. 

Pursuant to clause 3(h)(1) of rule XIII of the Rules of the House 

of Representatives, the staff of the Joint Committee on Taxation 

has determined that a complexity analysis is not required under 

section 4022(b) of the IRS Reform Act because the bill contains no 

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cability’’ to individuals or small businesses, within the meaning of 

the rule. 

F. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND

LIMITED TARIFF BENEFITS

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill, and states that the provisions of the bill do not 

contain any congressional earmarks, limited tax benefits, or limited 

tariff benefits within the meaning of the rule. 

G. DUPLICATION OF FEDERAL PROGRAMS

In compliance with Sec. 3(g)(2) of H. Res. 5 (114th Congress), the 

Committee states that no provision of the bill establishes or reauthorizes a program that was included in any report from the Government Accountability Office to Congress pursuant to section 21 

of Public Law 111–139. The Committee also states that the most 

recent Catalog of Federal Domestic Assistance, published pursuant 

to the Federal Program Information Act (Pub. L. No. 95–220, as 

amended by Pub. L. No. 98–169), identified program related to conservation easement contributions. 

H. DISCLOSURE OF DIRECTED RULE MAKINGS

In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), the 

following statement is made concerning directed rule makings: The 

Committee estimates that the bill requires no directed rule makings within the meaning of such section. 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

INTERNAL REVENUE CODE OF 1986 

* * * * * * * 

Subtitle A—Income Taxes 

* * * * * * * 

CHAPTER 1—NORMAL TAXES AND SURTAXES 

* * * * * * * 

Subchapter B—Computation of Taxable Income 

* * * * * * * 


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PART VI—ITEMIZED DEDUCTIONS FOR INDIVIDUALS 

AND CORPORATIONS 

* * * * * * * 

SEC. 170. CHARITABLE, ETC., CONTRIBUTIONS AND GIFTS. 

(a) ALLOWANCE OF DEDUCTION.— (1) GENERAL RULE.—There shall be allowed as a deduction 

any charitable contribution (as defined in subsection (c)) payment of which is made within the taxable year. A charitable 

contribution shall be allowable as a deduction only if verified 

under regulations prescribed by the Secretary. 

(2) CORPORATIONS ON ACCRUAL BASIS.—In the case of a corporation reporting its taxable income on the accrual basis, if— 

(A) the board of directors authorizes a charitable contribution during any taxable year, and 

(B) payment of such contribution is made after the close 

of such taxable year and on or before the 15th day of the 

third month following the close of such taxable year, 

then the taxpayer may elect to treat such contribution as paid 

during such taxable year. The election may be made only at 

the time of the filing of the return for such taxable year, and 

shall be signified in such manner as the Secretary shall by regulations prescribe. 

(3) FUTURE INTERESTS IN TANGIBLE PERSONAL PROPERTY.— For purposes of this section, payment of a charitable contribution which consists of a future interest in tangible personal 

property shall be treated as made only when all intervening interests in, and rights to the actual possession or enjoyment of, 

the property have expired or are held by persons other than 

the taxpayer or those standing in a relationship to the taxpayer described in section 267(b) or 707(b). For purposes of the 

preceding sentence, a fixture which is intended to be severed 

from the real property shall be treated as tangible personal 

property. 

(b) PERCENTAGE LIMITATIONS.— (1) INDIVIDUALS.—In the case of an individual, the deduction 

provided in subsection (a) shall be limited as provided in the 

succeeding subparagraphs. 

(A) GENERAL RULE.—Any charitable contribution to— 

(i) a church or a convention or association of churches, 

(ii) an educational organization which normally 

maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational 

activities are regularly carried on, 

(iii) an organization the principal purpose or functions of which are the providing of medical or hospital 

care or medical education or medical research, if the 

organization is a hospital, or if the organization is a 

medical research organization directly engaged in the 

continuous active conduct of medical research in conjunction with a hospital, and during the calendar year 

in which the contribution is made such organization is 

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search before January 1 of the fifth calendar year 

which begins after the date such contribution is made, 

(iv) an organization which normally receives a substantial part of its support (exclusive of income received in the exercise or performance by such organization of its charitable, educational, or other purpose 

or function constituting the basis for its exemption 

under section 501(a)) from the United States or any 

State or political subdivision thereof or from direct or 

indirect contributions from the general public, and 

which is organized and operated exclusively to receive, 

hold, invest, and administer property and to make expenditures to or for the benefit of a college or university which is an organization referred to in clause (ii) 

of this subparagraph and which is an agency or instrumentality of a State or political subdivision thereof, or 

which is owned or operated by a State or political subdivision thereof or by an agency or instrumentality of 

one or more States or political subdivisions, 

(v) a governmental unit referred to in subsection 

(c)(1), 

(vi) an organization referred to in subsection (c)(2) 

which normally receives a substantial part of its support (exclusive of income received in the exercise or 

performance by such organization of its charitable, 

educational, or other purpose or function constituting 

the basis for its exemption under section 501(a)) from 

a governmental unit referred to in subsection (c)(1) or 

from direct or indirect contributions from the general 

public, 

(vii) a private foundation described in subparagraph 

(F), or 

(viii) an organization described in section 509(a)(2) 

or (3), 

shall be allowed to the extent that the aggregate of such 

contributions does not exceed 50 percent of the taxpayer’s 

contribution base for the taxable year. 

(B) OTHER CONTRIBUTIONS.—Any charitable contribution 

other than a charitable contribution to which subparagraph (A) applies shall be allowed to the extent that the 

aggregate of such contributions does not exceed the lesser 

of— 

(i) 30 percent of the taxpayer’s contribution base for 

the taxable year, or 

(ii) the excess of 50 percent of the taxpayer’s contribution base for the taxable year over the amount of 

charitable contributions allowable under subparagraph 

(A) (determined without regard to subparagraph (C)). 

If the aggregate of such contributions exceeds the limitation of the preceding sentence, such excess shall be treated 

(in a manner consistent with the rules of subsection (d)(1)) 

as a charitable contribution (to which subparagraph (A) 

does not apply) in each of the 5 succeeding taxable years 

in order of time. 


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(C) SPECIAL LIMITATION WITH RESPECT TO CONTRIBUTIONS DESCRIBED IN SUBPARAGRAPH (A) OF CERTAIN CAPITAL

GAIN PROPERTY.— 

(i) In the case of charitable contributions described 

in subparagraph (A) of capital gain property to which 

subsection (e)(1)(B) does not apply, the total amount of 

contributions of such property which may be taken 

into account under subsection (a) for any taxable year 

shall not exceed 30 percent of the taxpayer’s contribution base for such year. For purposes of this subsection, contributions of capital gain property to which 

this subparagraph applies shall be taken into account 

after all other charitable contributions (other than 

charitable contributions to which subparagraph (D) 

applies). 

(ii) If charitable contributions described in subparagraph (A) of capital gain property to which clause (i) 

applies exceeds 30 percent of the taxpayer’s contribution base for any taxable year, such excess shall be 

treated, in a manner consistent with the rules of subsection (d)(1), as a charitable contribution of capital 

gain property to which clause (i) applies in each of the 

5 succeeding taxable years in order of time. 

(iii) At the election of the taxpayer (made at such 

time and in such manner as the Secretary prescribes 

by regulations), subsection (e)(1) shall apply to all contributions of capital gain property (to which subsection 

(e)(1)(B) does not otherwise apply) made by the taxpayer during the taxable year. If such an election is 

made, clauses (i) and (ii) shall not apply to contributions of capital gain property made during the taxable 

year, and, in applying subsection (d)(1) for such taxable year with respect to contributions of capital gain 

property made in any prior contribution year for which 

an election was not made under this clause, such contributions shall be reduced as if subsection (e)(1) had 

applied to such contributions in the year in which 

made. 

(iv) For purposes of this paragraph, the term ‘‘capital gain property’’ means, with respect to any contribution, any capital asset the sale of which at its fair 

market value at the time of the contribution would 

have resulted in gain which would have been longterm capital gain. For purposes of the preceding sentence, any property which is property used in the 

trade or business (as defined in section 1231(b)) shall 

be treated as a capital asset. 

(D) SPECIAL LIMITATION WITH RESPECT TO CONTRIBUTIONS OF CAPITAL GAIN PROPERTY TO ORGANIZATIONS NOT

DESCRIBED IN SUBPARAGRAPH (A).— 

(i) IN GENERAL.—In the case of charitable contributions (other than charitable contributions to which 

subparagraph (A) applies) of capital gain property, the 

total amount of such contributions of such property 


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taken into account under subsection (a) for any taxable year shall not exceed the lesser of— 

(I) 20 percent of the taxpayer’s contribution 

base for the taxable year, or 

(II) the excess of 30 percent of the taxpayer’s 

contribution base for the taxable year over the 

amount of the contributions of capital gain property to which subparagraph (C) applies. 

For purposes of this subsection, contributions of capital gain property to which this subparagraph applies 

shall be taken into account after all other charitable 

contributions. 

(ii) CARRYOVER.—If the aggregate amount of contributions described in clause (i) exceeds the limitation 

of clause (i), such excess shall be treated (in a manner 

consistent with the rules of subsection (d)(1)) as a 

charitable contribution of capital gain property to 

which clause (i) applies in each of the 5 succeeding 

taxable years in order of time. 

(E) CONTRIBUTIONS OF QUALIFIED CONSERVATION CON- TRIBUTIONS.— (i) IN GENERAL.—Any qualified conservation contribution (as defined in subsection (h)(1)) shall be allowed to the extent the aggregate of such contributions 

does not exceed the excess of 50 percent of the taxpayer’s contribution base over the amount of all other 

charitable contributions allowable under this paragraph. 

(ii) CARRYOVER.—If the aggregate amount of contributions described in clause (i) exceeds the limitation 

of clause (i), such excess shall be treated (in a manner 

consistent with the rules of subsection (d)(1)) as a 

charitable contribution to which clause (i) applies in 

each of the 15 succeeding years in order of time. 

(iii) COORDINATION WITH OTHER SUBPARAGRAPHS.— For purposes of applying this subsection and subsection (d)(1), contributions described in clause (i) 

shall not be treated as described in subparagraph (A), 

(B), (C), or (D) and such subparagraphs shall apply 

without regard to such contributions. 

(iv) SPECIAL RULE FOR CONTRIBUTION OF PROPERTY

USED IN AGRICULTURE OR LIVESTOCK PRODUCTION.— 

(I) IN GENERAL.—If the individual is a qualified 

farmer or rancher for the taxable year for which 

the contribution is made, clause (i) shall be applied by substituting ‘‘100 percent’’ for ‘‘50 percent’’. 

(II) EXCEPTION.—Subclause (I) shall not apply 

to any contribution of property made after the 

date of the enactment of this subparagraph which 

is used in agriculture or livestock production (or 

available for such production) unless such contribution is subject to a restriction that such property remain available for such production. This 

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spect to property to which subclause (I) does not 

apply by reason of the preceding sentence prior to 

its application to property to which subclause (I) 

does apply. 

(v) DEFINITION.—For purposes of clause (iv), the 

term ‘‘qualified farmer or rancher’’ means a taxpayer 

whose gross income from the trade or business of 

farming (within the meaning of section 2032A(e)(5)) is 

greater than 50 percent of the taxpayer’s gross income 

for the taxable year. 

ø(vi) TERMINATION.—This subparagraph shall not 

apply to any contribution made in taxable years beginning after December 31, 2014.¿ 

(F) CERTAIN PRIVATE FOUNDATIONS.—The private foundations referred to in subparagraph (A)(vii) and subsection 

(e)(1)(B) are— 

(i) a private operating foundation (as defined in section 4942(j)(3)), 

(ii) any other private foundation (as defined in section 509(a)) which, not later than the 15th day of the 

third month after the close of the foundation’s taxable 

year in which contributions are received, makes qualifying distributions (as defined in section 4942(g), without regard to paragraph (3) thereof), which are treated, after the application of section 4942(g)(3), as distributions out of corpus (in accordance with section 

4942(h)) in an amount equal to 100 percent of such 

contributions, and with respect to which the taxpayer 

obtains adequate records or other sufficient evidence 

from the foundation showing that the foundation made 

such qualifying distributions, and 

(iii) a private foundation all of the contributions to 

which are pooled in a common fund and which would 

be described in section 509(a)(3) but for the right of 

any substantial contributor (hereafter in this clause 

called ‘‘donor’’) or his spouse to designate annually the 

recipients, from among organizations described in 

paragraph (1) of section 509(a), of the income attributable to the donor’s contribution to the fund and to 

direct (by deed or by will) the payment, to an organization described in such paragraph (1), of the corpus 

in the common fund attributable to the donor’s contribution; but this clause shall apply only if all of the 

income of the common fund is required to be (and is) 

distributed to one or more organizations described in 

such paragraph (1) not later than the 15th day of the 

third month after the close of the taxable year in 

which the income is realized by the fund and only if 

all of the corpus attributable to any donor’s contribution to the fund is required to be (and is) distributed 

to one or more of such organizations not later than one 

year after his death or after the death of his surviving 

spouse if she has the right to designate the recipients 

of such corpus. 


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(G) CONTRIBUTION BASE DEFINED.—For purposes of this 

section, the term ‘‘contribution base’’ means adjusted gross 

income (computed without regard to any net operating loss 

carryback to the taxable year under section 172). 

(2) CORPORATIONS.—In the case of a corporation— 

(A) IN GENERAL.—The total deductions under subsection 

(a) for any taxable year (other than for contributions to 

which øsubparagraph (B) applies¿ subparagraph (B) or (C) 

applies) shall not exceed 10 percent of the taxpayer’s taxable income. 

(B) QUALIFIED CONSERVATION CONTRIBUTIONS BY CERTAIN CORPORATE FARMERS AND RANCHERS.— 

(i) IN GENERAL.—Any qualified conservation contribution (as defined in subsection (h)(1))— 

(I) which is made by a corporation which, for 

the taxable year during which the contribution is 

made, is a qualified farmer or rancher (as defined 

in paragraph (1)(E)(v)) and the stock of which is 

not readily tradable on an established securities 

market at any time during such year, and 

(II) which, in the case of contributions made 

after the date of the enactment of this subparagraph, is a contribution of property which is used 

in agriculture or livestock production (or available 

for such production) and which is subject to a restriction that such property remain available for 

such production, 

shall be allowed to the extent the aggregate of such 

contributions does not exceed the excess of the taxpayer’s taxable income over the amount of charitable 

contributions allowable under subparagraph (A). 

(ii) CARRYOVER.—If the aggregate amount of contributions described in clause (i) exceeds the limitation 

of clause (i), such excess shall be treated (in a manner 

consistent with the rules of subsection (d)(2)) as a 

charitable contribution to which clause (i) applies in 

each of the ø15 succeeding years¿ 15 succeeding taxable years in order of time. 

ø(iii) TERMINATION.—This subparagraph shall not 

apply to any contribution made in taxable years beginning after December 31, 2014.¿ 

(C) QUALIFIED CONSERVATION CONTRIBUTIONS BY CERTAIN NATIVE CORPORATIONS.— 

(i) IN GENERAL.—Any qualified conservation contribution (as defined in subsection (h)(1)) which— 

(I) is made by a Native Corporation, and 

(II) is a contribution of property which was land 

conveyed under the Alaska Native Claims Settlement Act, 

shall be allowed to the extent that the aggregate 

amount of such contributions does not exceed the excess 

of the taxpayer’s taxable income over the amount of 

charitable contributions allowable under subparagraph 

(A). 


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(ii) CARRYOVER.—If the aggregate amount of contributions described in clause (i) exceeds the limitation 

of clause (i), such excess shall be treated (in a manner 

consistent with the rules of subsection (d)(2)) as a charitable contribution to which clause (i) applies in each 

of the 15 succeeding taxable years in order of time. 

(iii) NATIVE CORPORATION.—For purposes of this subparagraph, the term ‘‘Native Corporation’’ has the 

meaning given such term by section 3(m) of the Alaska 

Native Claims Settlement Act. 

ø(C)¿ (D) TAXABLE INCOME.—For purposes of this paragraph, taxable income shall be computed without regard 

to— 

(i) this section, 

(ii) part VIII (except section 248), 

(iii) any net operating loss carryback to the taxable 

year under section 172, 

(iv) section 199, and 

(v) any capital loss carryback to the taxable year 

under section 1212(a)(1). 

(c) CHARITABLE CONTRIBUTION DEFINED.—For purposes of this 

section, the term ‘‘charitable contribution’’ means a contribution or 

gift to or for the use of— 

(1) A State, a possession of the United States, or any political subdivision of any of the foregoing, or the United States 

or the District of Columbia, but only if the contribution or gift 

is made for exclusively public purposes. 

(2) A corporation, trust, or community chest, fund, or foundation— 

(A) created or organized in the United States or in any 

possession thereof, or under the law of the United States, 

any State, the District of Columbia, or any possession of 

the United States; 

(B) organized and operated exclusively for religious, 

charitable, scientific, literary, or educational purposes, or 

to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals; 

(C) no part of the net earnings of which inures to the 

benefit of any private shareholder or individual; and 

(D) which is not disqualified for tax exemption under 

section 501(c)(3) by reason of attempting to influence legislation, and which does not participate in, or intervene in 

(including the publishing or distributing of statements), 

any political campaign on behalf of (or in opposition to) 

any candidate for public office. 

A contribution or gift by a corporation to a trust, chest, fund, 

or foundation shall be deductible by reason of this paragraph 

only if it is to be used within the United States or any of its 

possessions exclusively for purposes specified in subparagraph 

(B). Rules similar to the rules of section 501(j) shall apply for 

purposes of this paragraph. 


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(3) A post or organization of war veterans, or an auxiliary 

unit or society of, or trust or foundation for, any such post or 

organization— 

(A) organized in the United States or any of its possessions, and 

(B) no part of the net earnings of which inures to the 

benefit of any private shareholder or individual. 

(4) In the case of a contribution or gift by an individual, a 

domestic fraternal society, order, or association, operating 

under the lodge system, but only if such contribution or gift is 

to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty 

to children or animals. 

(5) A cemetery company owned and operated exclusively for 

the benefit of its members, or any corporation chartered solely 

for burial purposes as a cemetery corporation and not permitted by its charter to engage in any business not necessarily 

incident to that purpose, if such company or corporation is not 

operated for profit and no part of the net earnings of such company or corporation inures to the benefit of any private shareholder or individual. 

For purposes of this section, the term ‘‘charitable contribution’’ also 

means an amount treated under subsection (g) as paid for the use 

of an organization described in paragraph (2), (3), or (4). 

(d) CARRYOVERS OF EXCESS CONTRIBUTIONS.— 

(1) INDIVIDUALS.— 

(A) IN GENERAL.—In the case of an individual, if the 

amount of charitable contributions described in subsection 

(b)(1)(A) payment of which is made within a taxable year 

(hereinafter in this paragraph referred to as the ‘‘contribution year’’) exceeds 50 percent of the taxpayer’s contribution base for such year, such excess shall be treated as a 

charitable contribution described in subsection (b)(1)(A) 

paid in each of the 5 succeeding taxable years in order of 

time, but, with respect to any such succeeding taxable 

year, only to the extent of the lesser of the two following 

amounts: 

(i) the amount by which 50 percent of the taxpayer’s 

contribution base for such succeeding taxable year exceeds the sum of the charitable contributions described 

in subsection (b)(1)(A) payment of which is made by 

the taxpayer within such succeeding taxable year (determined without regard to this subparagraph) and 

the charitable contributions described in subsection 

(b)(1)(A) payment of which was made in taxable years 

before the contribution year which are treated under 

this subparagraph as having been paid in such succeeding taxable year; or 

(ii) in the case of the first succeeding taxable year, 

the amount of such excess, and in the case of the second, third, fourth, or fifth succeeding taxable year, the 

portion of such excess not treated under this subparagraph as a charitable contribution described in subsection (b)(1)(A) paid in any taxable year intervening 


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between the contribution year and such succeeding 

taxable year. 

(B) SPECIAL RULE FOR NET OPERATING LOSS

CARRYOVERS.—In applying subparagraph (A), the excess 

determined under subparagraph (A) for the contribution 

year shall be reduced to the extent that such excess reduces taxable income (as computed for purposes of the second sentence of section 172(b)(2)) and increases the net operating loss deduction for a taxable year succeeding the 

contribution year. 

(2) CORPORATIONS.— 

(A) IN GENERAL.—Any contribution made by a corporation in a taxable year (hereinafter in this paragraph referred to as the ‘‘contribution year’’) in excess of the 

amount deductible for such year under subsection (b)(2)(A) 

shall be deductible for each of the 5 succeeding taxable 

years in order of time, but only to the extent of the lesser 

of the two following amounts: (i) the excess of the maximum amount deductible for such succeeding taxable year 

under subsection (b)(2)(A) over the sum of the contributions made in such year plus the aggregate of the excess 

contributions which were made in taxable years before the 

contribution year and which are deductible under this subparagraph for such succeeding taxable year; or (ii) in the 

case of the first succeeding taxable year, the amount of 

such excess contribution, and in the case of the second, 

third, fourth, or fifth succeeding taxable year, the portion 

of such excess contribution not deductible under this subparagraph for any taxable year intervening between the 

contribution year and such succeeding taxable year. 

(B) SPECIAL RULE FOR NET OPERATING LOSS

CARRYOVERS.—For purposes of subparagraph (A), the excess of— 

(i) the contributions made by a corporation in a taxable year to which this section applies, over 

(ii) the amount deductible in such year under the 

limitation in subsection (b)(2)(A), 

shall be reduced to the extent that such excess reduces 

taxable income (as computed for purposes of the second 

sentence of section 172(b)(2)) and increases a net operating 

loss carryover under section 172 to a succeeding taxable 

year. 

(e) CERTAIN CONTRIBUTIONS OF ORDINARY INCOME AND CAPITAL

GAIN PROPERTY.— 

(1) GENERAL RULE.—The amount of any charitable contribution of property otherwise taken into account under this section shall be reduced by the sum of— 

(A) the amount of gain which would not have been longterm capital gain (determined without regard to section 

1221(b)(3)) if the property contributed had been sold by the 

taxpayer at its fair market value (determined at the time 

of such contribution), and 

(B) in the case of a charitable contribution— 

(i) of tangible personal property— 


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(I) if the use by the donee is unrelated to the 

purpose or function constituting the basis for its 

exemption under section 501 (or, in the case of a 

governmental unit, to any purpose or function described in subsection (c)), or 

(II) which is applicable property (as defined in 

paragraph (7)(C), but without regard to clause (ii) 

thereof) which is sold, exchanged, or otherwise 

disposed of by the donee before the last day of the 

taxable year in which the contribution was made 

and with respect to which the donee has not made 

a certification in accordance with paragraph 

(7)(D), 

(ii) to or for the use of a private foundation (as defined in section 509(a)), other than a private foundation described in subsection (b)(1)(F), 

(iii) of any patent, copyright (other than a copyright 

described in section 1221(a)(3) or 1231(b)(1)(C)), trademark, trade name, trade secret, know- how, software 

(other than software described in section 

197(e)(3)(A)(i)), or similar property, or applications or 

registrations of such property, or 

(iv) of any taxidermy property which is contributed 

by the person who prepared, stuffed, or mounted the 

property or by any person who paid or incurred the 

cost of such preparation, stuffing, or mounting, 

the amount of gain which would have been long-term capital gain if the property contributed had been sold by the 

taxpayer at its fair market value (determined at the time 

of such contribution). 

For purposes of applying this paragraph (other than in the 

case of gain to which section 617(d)(1), 1245(a), 1250(a), 

1252(a), or 1254(a) applies), property which is property used in 

the trade or business (as defined in section 1231(b)) shall be 

treated as a capital asset. For purposes of applying this paragraph in the case of a charitable contribution of stock in an S 

corporation, rules similar to the rules of section 751 shall apply 

in determining whether gain on such stock would have been 

long-term capital gain if such stock were sold by the taxpayer. 

(2) ALLOCATION OF BASIS.—For purposes of paragraph (1), in 

the case of a charitable contribution of less than the taxpayer’s 

entire interest in the property contributed, the taxpayer’s adjusted basis in such property shall be allocated between the interest contributed and any interest not contributed in accordance with regulations prescribed by the Secretary. 

(3) SPECIAL RULE FOR CERTAIN CONTRIBUTIONS OF INVENTORY

AND OTHER PROPERTY.— 

(A) QUALIFIED CONTRIBUTIONS.—For purposes of this 

paragraph, a qualified contribution shall mean a charitable contribution of property described in paragraph (1) or 

(2) of section 1221(a), by a corporation (other than a corporation which is an S corporation) to an organization 

which is described in section 501(c)(3) and is exempt under 

section 501(a) (other than a private foundation, as defined 


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in section 509(a), which is not an operating foundation, as 

defined in section 4942(j)(3)), but only if— 

(i) the use of the property by the donee is related to 

the purpose or function constituting the basis for its 

exemption under section 501 and the property is to be 

used by the donee solely for the care of the ill, the 

needy, or infants; 

(ii) the property is not transferred by the donee in 

exchange for money, other property, or services; 

(iii) the taxpayer receives from the donee a written 

statement representing that its use and disposition of 

the property will be in accordance with the provisions 

of clauses (i) and (ii); and 

(iv) in the case where the property is subject to regulation under the Federal Food, Drug, and Cosmetic 

Act, as amended, such property must fully satisfy the 

applicable requirements of such Act and regulations 

promulgated thereunder on the date of transfer and 

for one hundred and eighty days prior thereto. 

(B) AMOUNT OF REDUCTION.—The reduction under paragraph (1)(A) for any qualified contribution (as defined in 

subparagraph (A)) shall be no greater than the sum of— 

(i) one-half of the amount computed under paragraph (1)(A) (computed without regard to this paragraph), and 

(ii) the amount (if any) by which the charitable contribution deduction under this section for any qualified 

contribution (computed by taking into account the 

amount determined in clause (i), but without regard to 

this clause) exceeds twice the basis of such property. 

(C) SPECIAL RULE FOR CONTRIBUTIONS OF FOOD INVENTORY.— 

(i) GENERAL RULE.—In the case of a charitable contribution of food from any trade or business of the taxpayer, this paragraph shall be applied— 

(I) without regard to whether the contribution is 

made by a C corporation, and 

(II) only to food that is apparently wholesome 

food. 

(ii) LIMITATION.—In the case of a taxpayer other 

than a C corporation, the aggregate amount of such 

contributions for any taxable year which may be taken 

into account under this section shall not exceed 10 

percent of the taxpayer’s aggregate net income for 

such taxable year from all trades or businesses from 

which such contributions were made for such year, 

computed without regard to this section. 

(iii) APPARENTLY WHOLESOME FOOD.—For purposes 

of this subparagraph, the term ‘‘apparently wholesome 

food’’ has the meaning given to such term by section 

22(b)(2) of the Bill Emerson Good Samaritan Food Donation Act (42 U.S.C. 1791(b)(2)), as in effect on the 

date of the enactment of this subparagraph. 

(iv) TERMINATION.—This subparagraph shall not 

apply to contributions made after December 31, 2014. 


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(D) SPECIAL RULE FOR CONTRIBUTIONS OF BOOK INVENTORY TO PUBLIC SCHOOLS.— 

(i) CONTRIBUTIONS OF BOOK INVENTORY.—In determining whether a qualified book contribution is a 

qualified contribution, subparagraph (A) shall be applied without regard to whether the donee is an organization described in the matter preceding clause (i) of 

subparagraph (A). 

(ii) QUALIFIED BOOK CONTRIBUTION.—For purposes 

of this paragraph, the term ‘‘qualified book contribution’’ means a charitable contribution of books to a 

public school which is an educational organization described in subsection (b)(1)(A)(ii) and which provides 

elementary education or secondary education (kindergarten through grade 12). 

(iii) CERTIFICATION BY DONEE.—Subparagraph (A) 

shall not apply to any contribution of books unless (in 

addition to the certifications required by subparagraph 

(A) (as modified by this subparagraph)), the donee certifies in writing that— 

(I) the books are suitable, in terms of currency, 

content, and quantity, for use in the donee’s educational programs, and 

(II) the donee will use the books in its educational programs. 

(iv) TERMINATION.—This subparagraph shall not 

apply to contributions made after December 31, 2011. 

(E) This paragraph shall not apply to so much of the 

amount of the gain described in paragraph (1)(A) which 

would be long-term capital gain but for the application of 

sections 617, 1245, 1250, or 1252. 

(4) SPECIAL RULE FOR CONTRIBUTIONS OF SCIENTIFIC PROPERTY USED FOR RESEARCH.— 

(A) LIMIT ON REDUCTION.—In the case of a qualified research contribution, the reduction under paragraph (1)(A) 

shall be no greater than the amount determined under 

paragraph (3)(B). 

(B) QUALIFIED RESEARCH CONTRIBUTIONS.—For purposes 

of this paragraph, the term ‘‘qualified research contribution’’ means a charitable contribution by a corporation of 

tangible personal property described in paragraph (1) of 

section 1221(a), but only if— 

(i) the contribution is to an organization described in 

subparagraph (A) or subparagraph (B) of section 

41(e)(6), 

(ii) the property is constructed or assembled by the 

taxpayer, 

(iii) the contribution is made not later than 2 years 

after the date the construction or assembly of the 

property is substantially completed, 

(iv) the original use of the property is by the donee, 

(v) the property is scientific equipment or apparatus 

substantially all of the use of which by the donee is for 

research or experimentation (within the meaning of 


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section 174), or for research training, in the United 

States in physical or biological sciences, 

(vi) the property is not transferred by the donee in 

exchange for money, other property, or services, and 

(vii) the taxpayer receives from the donee a written 

statement representing that its use and disposition of 

the property will be in accordance with the provisions 

of clauses (v) and (vi). 

(C) CONSTRUCTION OF PROPERTY BY TAXPAYER.—For purposes of this paragraph, property shall be treated as constructed by the taxpayer only if the cost of the parts used 

in the construction of such property (other than parts manufactured by the taxpayer or a related person) do not exceed 50 percent of the taxpayer’s basis in such property. 

(D) CORPORATION.—For purposes of this paragraph, the 

term ‘‘corporation’’ shall not include— 

(i) an S corporation, 

(ii) a personal holding company (as defined in section 542), and 

(iii) a service organization (as defined in section 

414(m)(3)). 

(5) SPECIAL RULE FOR CONTRIBUTIONS OF STOCK FOR WHICH

MARKET QUOTATIONS ARE READILY AVAILABLE.— (A) IN GENERAL.—Subparagraph (B)(ii) of paragraph (1) 

shall not apply to any contribution of qualified appreciated 

stock. 

(B) QUALIFIED APPRECIATED STOCK.—Except as provided 

in subparagraph (C), for purposes of this paragraph, the 

term ‘‘qualified appreciated stock’’ means any stock of a 

corporation— 

(i) for which (as of the date of the contribution) market quotations are readily available on an established 

securities market, and 

(ii) which is capital gain property (as defined in subsection (b)(1)(C)(iv)). 

(C) DONOR MAY NOT CONTRIBUTE MORE THAN 10 PERCENT

OF STOCK OF CORPORATION.— (i) IN GENERAL.—In the case of any donor, the term 

‘‘qualified appreciated stock’’ shall not include any 

stock of a corporation contributed by the donor in a 

contribution to which paragraph (1)(B)(ii) applies (determined without regard to this paragraph) to the extent that the amount of the stock so contributed (when 

increased by the aggregate amount of all prior such 

contributions by the donor of stock in such corporation) exceeds 10 percent (in value) of all of the outstanding stock of such corporation. 

(ii) SPECIAL RULE.—For purposes of clause (i), an individual shall be treated as making all contributions 

made by any member of his family (as defined in section 267(c)(4)). 

(7) RECAPTURE OF DEDUCTION ON CERTAIN DISPOSITIONS OF

EXEMPT USE PROPERTY.— 

(A) IN GENERAL.—In the case of an applicable disposition 

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come of the donor of such property for the taxable year of 

such donor in which the applicable disposition occurs an 

amount equal to the excess (if any) of— 

(i) the amount of the deduction allowed to the donor 

under this section with respect to such property, over 

(ii) the donor’s basis in such property at the time 

such property was contributed. 

(B) APPLICABLE DISPOSITION.—For purposes of this paragraph, the term ‘‘applicable disposition’’ means any sale, 

exchange, or other disposition by the donee of applicable 

property— 

(i) after the last day of the taxable year of the donor 

in which such property was contributed, and 

(ii) before the last day of the 3-year period beginning 

on the date of the contribution of such property, 

unless the donee makes a certification in accordance with 

subparagraph (D). 

(C) APPLICABLE PROPERTY.—For purposes of this paragraph, the term ‘‘applicable property’’ means charitable deduction property (as defined in section 6050L(a)(2)(A))— 

(i) which is tangible personal property the use of 

which is identified by the donee as related to the purpose or function constituting the basis of the donee’s 

exemption under section 501, and 

(ii) for which a deduction in excess of the donor’s 

basis is allowed. 

(D) CERTIFICATION.—A certification meets the requirements of this subparagraph if it is a written statement 

which is signed under penalty of perjury by an officer of 

the donee organization and— 

(i) which— 

(I) certifies that the use of the property by the 

donee was substantial and related to the purpose 

or function constituting the basis for the donee’s 

exemption under section 501, and 

(II) describes how the property was used and 

how such use furthered such purpose or function, 

or 

(ii) which— 

(I) states the intended use of the property by 

the donee at the time of the contribution, and 

(II) certifies that such intended use has become 

impossible or infeasible to implement. 

(f) DISALLOWANCE OF DEDUCTION IN CERTAIN CASES AND SPECIAL

RULES.— 

(1) IN GENERAL.—No deduction shall be allowed under this 

section for a contribution to or for the use of an organization 

or trust described in section 508(d) or 4948(c)(4) subject to the 

conditions specified in such sections. 

(2) CONTRIBUTIONS OF PROPERTY PLACED IN TRUST.— (A) REMAINDER INTEREST.—In the case of property transferred in trust, no deduction shall be allowed under this 

section for the value of a contribution of a remainder interest unless the trust is a charitable remainder annuity 

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tion 664), or a pooled income fund (described in section 

642(c)(5)). 

(B) INCOME INTERESTS, ETC..—No deduction shall be allowed under this section for the value of any interest in 

property (other than a remainder interest) transferred in 

trust unless the interest is in the form of a guaranteed annuity or the trust instrument specifies that the interest is 

a fixed percentage distributed yearly of the fair market 

value of the trust property (to be determined yearly) and 

the grantor is treated as the owner of such interest for 

purposes of applying section 671. If the donor ceases to be 

treated as the owner of such an interest for purposes of applying section 671, at the time the donor ceases to be so 

treated, the donor shall for purposes of this chapter be considered as having received an amount of income equal to 

the amount of any deduction he received under this section 

for the contribution reduced by the discounted value of all 

amounts of income earned by the trust and taxable to him 

before the time at which he ceases to be treated as the 

owner of the interest. Such amounts of income shall be discounted to the date of the contribution. The Secretary shall 

prescribe such regulations as may be necessary to carry 

out the purposes of this subparagraph. 

(C) DENIAL OF DEDUCTION IN CASE OF PAYMENTS BY CER- TAIN TRUSTS.—In any case in which a deduction is allowed 

under this section for the value of an interest in property 

described in subparagraph (B), transferred in trust, no deduction shall be allowed under this section to the grantor 

or any other person for the amount of any contribution 

made by the trust with respect to such interest. 

(D) EXCEPTION.—This paragraph shall not apply in a 

case in which the value of all interests in property transferred in trust are deductible under subsection (a). 

(3) DENIAL OF DEDUCTION IN CASE OF CERTAIN CONTRIBUTIONS OF PARTIAL INTERESTS IN PROPERTY.— (A) IN GENERAL.—In the case of a contribution (not made 

by a transfer in trust) of an interest in property which consists of less than the taxpayer’s entire interest in such 

property, a deduction shall be allowed under this section 

only to the extent that the value of the interest contributed would be allowable as a deduction under this section 

if such interest had been transferred in trust. For purposes 

of this subparagraph, a contribution by a taxpayer of the 

right to use property shall be treated as a contribution of 

less than the taxpayer’s entire interest in such property. 

(B) EXCEPTIONS.—Subparagraph (A) shall not apply to— 

(i) a contribution of a remainder interest in a personal residence or farm, 

(ii) a contribution of an undivided portion of the taxpayer’s entire interest in property, and 

(iii) a qualified conservation contribution. 

(4) VALUATION OF REMAINDER INTEREST IN REAL PROPERTY.— For purposes of this section, in determining the value of a remainder interest in real property, depreciation (computed on 

the straight line method) and depletion of such property shall 


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be taken into account, and such value shall be discounted at 

a rate of 6 percent per annum, except that the Secretary may 

prescribe a different rate. 

(5) REDUCTION FOR CERTAIN INTEREST.—If, in connection 

with any charitable contribution, a liability is assumed by the 

recipient or by any other person, or if a charitable contribution 

is of property which is subject to a liability, then, to the extent 

necessary to avoid the duplication of amounts, the amount 

taken into account for purposes of this section as the amount 

of the charitable contribution— 

(A) shall be reduced for interest (i) which has been paid 

(or is to be paid) by the taxpayer, (ii) which is attributable 

to the liability, and (iii) which is attributable to any period 

after the making of the contribution, and 

(B) in the case of a bond, shall be further reduced for interest (i) which has been paid (or is to be paid) by the taxpayer on indebtedness incurred or continued to purchase 

or carry such bond, and (ii) which is attributable to any period before the making of the contribution. 

The reduction pursuant to subparagraph (B) shall not exceed 

the interest (including interest equivalent) on the bond which 

is attributable to any period before the making of the contribution and which is not (under the taxpayer’s method of accounting) includible in the gross income of the taxpayer for any taxable year. For purposes of this paragraph, the term ‘‘bond’’ 

means any bond, debenture, note, or certificate or other evidence of indebtedness. 

(6) DEDUCTIONS FOR OUT-OF-POCKET EXPENDITURES.—No deduction shall be allowed under this section for an out-of-pocket 

expenditure made by any person on behalf of an organization 

described in subsection (c) (other than an organization described in section 501(h)(5) (relating to churches, etc.)) if the 

expenditure is made for the purpose of influencing legislation 

(within the meaning of section 501(c)(3)). 

(7) Reformations to comply with paragraph (2) 

(A) IN GENERAL.—A deduction shall be allowed under 

subsection (a) in respect of any qualified reformation 

(within the meaning of section 2055(e)(3)(B)). 

(B) RULES SIMILAR TO SECTION 2055(E)(3) TO APPLY.—For 

purposes of this paragraph, rules similar to the rules of 

section 2055(e)(3) shall apply. 

(8) SUBSTANTIATION REQUIREMENT FOR CERTAIN CONTRIBUTIONS.— 

(A) GENERAL RULE.—No deduction shall be allowed 

under subsection (a) for any contribution of $250 or more 

unless the taxpayer substantiates the contribution by a 

contemporaneous written acknowledgment of the contribution by the donee organization that meets the requirements of subparagraph (B). 

(B) CONTENT OF ACKNOWLEDGEMENT.—An acknowledgement meets the requirements of this subparagraph if it includes the following information: 

(i) The amount of cash and a description (but not 

value) of any property other than cash contributed. 


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(ii) Whether the donee organization provided any 

goods or services in consideration, in whole or in part, 

for any property described in clause (i). 

(iii) A description and good faith estimate of the 

value of any goods or services referred to in clause (ii) 

or, if such goods or services consist solely of intangible 

religious benefits, a statement to that effect. 

For purposes of this subparagraph, the term ‘‘intangible 

religious benefit’’ means any intangible religious benefit 

which is provided by an organization organized exclusively 

for religious purposes and which generally is not sold in a 

commercial transaction outside the donative context. 

(C) CONTEMPORANEOUS.—For purposes of subparagraph 

(A), an acknowledgment shall be considered to be contemporaneous if the taxpayer obtains the acknowledgment on 

or before the earlier of— 

(i) the date on which the taxpayer files a return for 

the taxable year in which the contribution was made, 

or 

(ii) the due date (including extensions) for filing 

such return. 

(D) SUBSTANTIATION NOT REQUIRED FOR CONTRIBUTIONS

REPORTED BY THE DONEE ORGANIZATION.—Subparagraph 

(A) shall not apply to a contribution if the donee organization files a return, on such form and in accordance with 

such regulations as the Secretary may prescribe, which includes the information described in subparagraph (B) with 

respect to the contribution. 

(E) REGULATIONS.—The Secretary shall prescribe such 

regulations as may be necessary or appropriate to carry 

out the purposes of this paragraph, including regulations 

that may provide that some or all of the requirements of 

this paragraph do not apply in appropriate cases. 

(9) DENIAL OF DEDUCTION WHERE CONTRIBUTION FOR LOBBYING ACTIVITIES.—No deduction shall be allowed under this 

section for a contribution to an organization which conducts activities to which section 162(e)(1) applies on matters of direct 

financial interest to the donor’s trade or business, if a principal 

purpose of the contribution was to avoid Federal income tax by 

securing a deduction for such activities under this section 

which would be disallowed by reason of section 162(e) if the 

donor had conducted such activities directly. No deduction 

shall be allowed under section 162(a) for any amount for which 

a deduction is disallowed under the preceding sentence. 

(10) SPLIT-DOLLAR LIFE INSURANCE, ANNUITY, AND ENDOWMENT CONTRACTS.— 

(A) IN GENERAL.—Nothing in this section or in section 

545(b)(2), 642(c), 2055, 2106(a)(2), or 2522 shall be construed to allow a deduction, and no deduction shall be allowed, for any transfer to or for the use of an organization 

described in subsection (c) if in connection with such transfer— 

(i) the organization directly or indirectly pays, or 

has previously paid, any premium on any personal 

benefit contract with respect to the transferor, or 


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(ii) there is an understanding or expectation that 

any person will directly or indirectly pay any premium 

on any personal benefit contract with respect to the 

transferor. 

(B) PERSONAL BENEFIT CONTRACT.—For purposes of subparagraph (A), the term ‘‘personal benefit contract’’ means, 

with respect to the transferor, any life insurance, annuity, 

or endowment contract if any direct or indirect beneficiary 

under such contract is the transferor, any member of the 

transferor’s family, or any other person (other than an organization described in subsection (c)) designated by the 

transferor. 

(C) APPLICATION TO CHARITABLE REMAINDER TRUSTS.—In 

the case of a transfer to a trust referred to in subparagraph (E), references in subparagraphs (A) and (F) to an 

organization described in subsection (c) shall be treated as 

a reference to such trust. 

(D) EXCEPTION FOR CERTAIN ANNUITY CONTRACTS.—If, in 

connection with a transfer to or for the use of an organization described in subsection (c), such organization incurs 

an obligation to pay a charitable gift annuity (as defined 

in section 501(m)) and such organization purchases any 

annuity contract to fund such obligation, persons receiving 

payments under the charitable gift annuity shall not be 

treated for purposes of subparagraph (B) as indirect beneficiaries under such contract if— 

(i) such organization possesses all of the incidents of 

ownership under such contract, 

(ii) such organization is entitled to all the payments 

under such contract, and 

(iii) the timing and amount of payments under such 

contract are substantially the same as the timing and 

amount of payments to each such person under such 

obligation (as such obligation is in effect at the time 

of such transfer). 

(E) EXCEPTION FOR CERTAIN CONTRACTS HELD BY CHARITABLE REMAINDER TRUSTS.—A person shall not be treated 

for purposes of subparagraph (B) as an indirect beneficiary 

under any life insurance, annuity, or endowment contract 

held by a charitable remainder annuity trust or a charitable remainder unitrust (as defined in section 664(d)) 

solely by reason of being entitled to any payment referred 

to in paragraph (1)(A) or (2)(A) of section 664(d) if— 

(i) such trust possesses all of the incidents of ownership under such contract, and 

(ii) such trust is entitled to all the payments under 

such contract. 

(F) EXCISE TAX ON PREMIUMS PAID.— 

(i) IN GENERAL.—There is hereby imposed on any organization described in subsection (c) an excise tax 

equal to the premiums paid by such organization on 

any life insurance, annuity, or endowment contract if 

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lowable under subparagraph (A), determined without 

regard to when such transfer is made. 

(ii) PAYMENTS BY OTHER PERSONS.—For purposes of 

clause (i), payments made by any other person pursuant to an understanding or expectation referred to in 

subparagraph (A) shall be treated as made by the organization. 

(iii) REPORTING.—Any organization on which tax is 

imposed by clause (i) with respect to any premium 

shall file an annual return which includes— 

(I) the amount of such premiums paid during 

the year and the name and TIN of each beneficiary under the contract to which the premium 

relates, and 

(II) such other information as the Secretary may 

require. 

The penalties applicable to returns required under section 6033 shall apply to returns required under this 

clause. Returns required under this clause shall be 

furnished at such time and in such manner as the Secretary shall by forms or regulations require. 

(iv) CERTAIN RULES TO APPLY.—The tax imposed by 

this subparagraph shall be treated as imposed by 

chapter 42 for purposes of this title other than subchapter B of chapter 42. 

(G) SPECIAL RULE WHERE STATE REQUIRES SPECIFICATION

OF CHARITABLE GIFT ANNUITANT IN CONTRACT.—In the case 

of an obligation to pay a charitable gift annuity referred to 

in subparagraph (D) which is entered into under the laws 

of a State which requires, in order for the charitable gift 

annuity to be exempt from insurance regulation by such 

State, that each beneficiary under the charitable gift annuity be named as a beneficiary under an annuity contract 

issued by an insurance company authorized to transact 

business in such State, the requirements of clauses (i) and 

(ii) of subparagraph (D) shall be treated as met if— 

(i) such State law requirement was in effect on February 8, 1999, 

(ii) each such beneficiary under the charitable gift 

annuity is a bona fide resident of such State at the 

time the obligation to pay a charitable gift annuity is 

entered into, and 

(iii) the only persons entitled to payments under 

such contract are persons entitled to payments as 

beneficiaries under such obligation on the date such 

obligation is entered into. 

(H) MEMBER OF FAMILY.—For purposes of this paragraph, an individual’s family consists of the individual’s 

grandparents, the grandparents of such individual’s 

spouse, the lineal descendants of such grandparents, and 

any spouse of such a lineal descendant. 

(I) REGULATIONS.—The Secretary shall prescribe such 

regulations as may be necessary or appropriate to carry 

out the purposes of this paragraph, including regulations 

to prevent the avoidance of such purposes. 


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(11) QUALIFIED APPRAISAL AND OTHER DOCUMENTATION FOR

CERTAIN CONTRIBUTIONS.— 

(A) IN GENERAL.— 

(i) DENIAL OF DEDUCTION.—In the case of an individual, partnership, or corporation, no deduction shall 

be allowed under subsection (a) for any contribution of 

property for which a deduction of more than $500 is 

claimed unless such person meets the requirements of 

subparagraphs (B), (C), and (D), as the case may be, 

with respect to such contribution. 

(ii) EXCEPTIONS.— 

(I) READILY VALUED PROPERTY.—Subparagraphs 

(C) and (D) shall not apply to cash, property described in subsection (e)(1)(B)(iii) or section 

1221(a)(1), publicly traded securities (as defined in 

section 6050L(a)(2)(B)), and any qualified vehicle 

described in paragraph (12)(A)(ii) for which an acknowledgement under paragraph (12)(B)(iii) is 

provided. 

(II) REASONABLE CAUSE.—Clause (i) shall not 

apply if it is shown that the failure to meet such 

requirements is due to reasonable cause and not 

to willful neglect. 

(B) PROPERTY DESCRIPTION FOR CONTRIBUTIONS OF MORE

THAN $500.—In the case of contributions of property for 

which a deduction of more than $500 is claimed, the requirements of this subparagraph are met if the individual, 

partnership or corporation includes with the return for the 

taxable year in which the contribution is made a description of such property and such other information as the 

Secretary may require. The requirements of this subparagraph shall not apply to a C corporation which is not a 

personal service corporation or a closely held C corporation. 

(C) QUALIFIED APPRAISAL FOR CONTRIBUTIONS OF MORE

THAN $5,000.—In the case of contributions of property for 

which a deduction of more than $5,000 is claimed, the requirements of this subparagraph are met if the individual, 

partnership, or corporation obtains a qualified appraisal of 

such property and attaches to the return for the taxable 

year in which such contribution is made such information 

regarding such property and such appraisal as the Secretary may require. 

(D) SUBSTANTIATION FOR CONTRIBUTIONS OF MORE THAN

$500,000.—In the case of contributions of property for which 

a deduction of more than $500,000 is claimed, the requirements of this subparagraph are met if the individual, partnership, or corporation attaches to the return for the taxable year a qualified appraisal of such property. 

(E) QUALIFIED APPRAISAL AND APPRAISER.—For purposes 

of this paragraph— 

(i) QUALIFIED APPRAISAL.—The term ‘‘qualified appraisal’’ means, with respect to any property, an appraisal of such property which— 


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(I) is treated for purposes of this paragraph as 

a qualified appraisal under regulations or other 

guidance prescribed by the Secretary, and 

(II) is conducted by a qualified appraiser in accordance with generally accepted appraisal standards and any regulations or other guidance prescribed under subclause (I). 

(ii) QUALIFIED APPRAISER.—Except as provided in 

clause (iii), the term ‘‘qualified appraiser’’ means an 

individual who— 

(I) has earned an appraisal designation from a 

recognized professional appraiser organization or 

has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary, 

(II) regularly performs appraisals for which the 

individual receives compensation, and 

(III) meets such other requirements as may be 

prescribed by the Secretary in regulations or other 

guidance. 

(iii) SPECIFIC APPRAISALS.—An individual shall not 

be treated as a qualified appraiser with respect to any 

specific appraisal unless— 

(I) the individual demonstrates verifiable education and experience in valuing the type of property subject to the appraisal, and 

(II) the individual has not been prohibited from 

practicing before the Internal Revenue Service by 

the Secretary under section 330(c) of title 31, 

United States Code, at any time during the 3-year 

period ending on the date of the appraisal. 

(F) AGGREGATION OF SIMILAR ITEMS OF PROPERTY.—For 

purposes of determining thresholds under this paragraph, 

property and all similar items of property donated to 1 or 

more donees shall be treated as 1 property. 

(G) SPECIAL RULE FOR PASS-THRU ENTITIES.—In the case 

of a partnership or S corporation, this paragraph shall be 

applied at the entity level, except that the deduction shall 

be denied at the partner or shareholder level. 

(H) REGULATIONS.—The Secretary may prescribe such 

regulations as may be necessary or appropriate to carry 

out the purposes of this paragraph, including regulations 

that may provide that some or all of the requirements of 

this paragraph do not apply in appropriate cases. 

(12) CONTRIBUTIONS OF USED MOTOR VEHICLES, BOATS, AND

AIRPLANES.— 

(A) IN GENERAL.—In the case of a contribution of a qualified vehicle the claimed value of which exceeds $500— 

(i) paragraph (8) shall not apply and no deduction 

shall be allowed under subsection (a) for such contribution unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgement of the contribution by the donee organization 

that meets the requirements of subparagraph (B) and 


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includes the acknowledgement with the taxpayer’s return of tax which includes the deduction, and 

(ii) if the organization sells the vehicle without any 

significant intervening use or material improvement of 

such vehicle by the organization, the amount of the deduction allowed under subsection (a) shall not exceed 

the gross proceeds received from such sale. 

(B) CONTENT OF ACKNOWLEDGEMENT.—An acknowledgement meets the requirements of this subparagraph if it includes the following information: 

(i) The name and taxpayer identification number of 

the donor. 

(ii) The vehicle identification number or similar 

number. 

(iii) In the case of a qualified vehicle to which subparagraph (A)(ii) applies— 

(I) a certification that the vehicle was sold in an 

arm’s length transaction between unrelated parties, 

(II) the gross proceeds from the sale, and 

(III) a statement that the deductible amount 

may not exceed the amount of such gross proceeds. 

(iv) In the case of a qualified vehicle to which subparagraph (A)(ii) does not apply— 

(I) a certification of the intended use or material 

improvement of the vehicle and the intended duration of such use, and 

(II) a certification that the vehicle would not be 

transferred in exchange for money, other property, 

or services before completion of such use or improvement. 

(v) Whether the donee organization provided any 

goods or services in consideration, in whole or in part, 

for the qualified vehicle. 

(vi) A description and good faith estimate of the 

value of any goods or services referred to in clause (v) 

or, if such goods or services consist solely of intangible 

religious benefits (as defined in paragraph (8)(B)), a 

statement to that effect. 

(C) CONTEMPORANEOUS.—For purposes of subparagraph 

(A), an acknowledgement shall be considered to be contemporaneous if the donee organization provides it within 30 

days of— 

(i) the sale of the qualified vehicle, or 

(ii) in the case of an acknowledgement including a 

certification described in subparagraph (B)(iv), the 

contribution of the qualified vehicle. 

(D) INFORMATION TO SECRETARY.—A donee organization 

required to provide an acknowledgement under this paragraph shall provide to the Secretary the information contained in the acknowledgement. Such information shall be 

provided at such time and in such manner as the Secretary may prescribe. 


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(E) QUALIFIED VEHICLE.—For purposes of this paragraph, the term ‘‘qualified vehicle’’ means any— 

(i) motor vehicle manufactured primarily for use on 

public streets, roads, and highways, 

(ii) boat, or 

(iii) airplane. 

Such term shall not include any property which is described in section 1221(a)(1). 

(F) REGULATIONS OR OTHER GUIDANCE.—The Secretary 

shall prescribe such regulations or other guidance as may 

be necessary to carry out the purposes of this paragraph. 

The Secretary may prescribe regulations or other guidance 

which exempts sales by the donee organization which are 

in direct furtherance of such organization’s charitable purpose from the requirements of subparagraphs (A)(ii) and 

(B)(iv)(II). 

(13) CONTRIBUTIONS OF CERTAIN INTERESTS IN BUILDINGS LO- CATED IN REGISTERED HISTORIC DISTRICTS.— (A) IN GENERAL.—No deduction shall be allowed with respect to any contribution described in subparagraph (B) 

unless the taxpayer includes with the return for the taxable year of the contribution a $500 filing fee. 

(B) CONTRIBUTION DESCRIBED.—A contribution is described in this subparagraph if such contribution is a 

qualified conservation contribution (as defined in subsection (h)) which is a restriction with respect to the exterior of a building described in subsection (h)(4)(C)(ii) and 

for which a deduction is claimed in excess of $10,000. 

(C) DEDICATION OF FEE.—Any fee collected under this 

paragraph shall be used for the enforcement of the provisions of subsection (h). 

(14) REDUCTION FOR AMOUNTS ATTRIBUTABLE TO REHABILITATION CREDIT.—In the case of any qualified conservation contribution (as defined in subsection (h)), the amount of the deduction allowed under this section shall be reduced by an 

amount which bears the same ratio to the fair market value 

of the contribution as— 

(A) the sum of the credits allowed to the taxpayer under 

section 47 for the 5 preceding taxable years with respect 

to any building which is a part of such contribution, bears 

to 

(B) the fair market value of the building on the date of 

the contribution. 

(15) SPECIAL RULE FOR TAXIDERMY PROPERTY.— 

(A) BASIS.—For purposes of this section and notwithstanding section 1012, in the case of a charitable contribution of taxidermy property which is made by the person 

who prepared, stuffed, or mounted the property or by any 

person who paid or incurred the cost of such preparation, 

stuffing, or mounting, only the cost of the preparing, stuffing, or mounting shall be included in the basis of such 

property. 

(B) TAXIDERMY PROPERTY.—For purposes of this section, 

the term ‘‘taxidermy property’’ means any work of art 

which— 


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(i) is the reproduction or preservation of an animal, 

in whole or in part, 

(ii) is prepared, stuffed, or mounted for purposes of 

recreating one or more characteristics of such animal, 

and 

(iii) contains a part of the body of the dead animal. 

(16) CONTRIBUTIONS OF CLOTHING AND HOUSEHOLD ITEMS.— 

(A) IN GENERAL.—In the case of an individual, partnership, or corporation, no deduction shall be allowed under 

subsection (a) for any contribution of clothing or a household item unless such clothing or household item is in good 

used condition or better. 

(B) ITEMS OF MINIMAL VALUE.—Notwithstanding subparagraph (A), the Secretary may by regulation deny a deduction under subsection (a) for any contribution of clothing or a household item which has minimal monetary 

value. 

(C) EXCEPTION FOR CERTAIN PROPERTY.—Subparagraphs 

(A) and (B) shall not apply to any contribution of a single 

item of clothing or a household item for which a deduction 

of more than $500 is claimed if the taxpayer includes with 

the taxpayer’s return a qualified appraisal with respect to 

the property. 

(D) HOUSEHOLD ITEMS.—For purposes of this paragraph— 

(i) IN GENERAL.—The term ‘‘household items’’ includes furniture, furnishings, electronics, appliances, 

linens, and other similar items. 

(ii) EXCLUDED ITEMS.—Such term does not include— 

(I) food, 

(II) paintings, antiques, and other objects of art, 

(III) jewelry and gems, and 

(IV) collections. 

(E) SPECIAL RULE FOR PASS-THRU ENTITIES.—In the case 

of a partnership or S corporation, this paragraph shall be 

applied at the entity level, except that the deduction shall 

be denied at the partner or shareholder level. 

(17) RECORDKEEPING.—No deduction shall be allowed under 

subsection (a) for any contribution of a cash, check, or other 

monetary gift unless the donor maintains as a record of such 

contribution a bank record or a written communication from 

the donee showing the name of the donee organization, the 

date of the contribution, and the amount of the contribution. 

(18) CONTRIBUTIONS TO DONOR ADVISED FUNDS.—A deduction 

otherwise allowed under subsection (a) for any contribution to 

a donor advised fund (as defined in section 4966(d)(2)) shall 

only be allowed if— 

(A) the sponsoring organization (as defined in section 

4966(d)(1)) with respect to such donor advised fund is 

not— 

(i) described in paragraph (3), (4), or (5) of subsection (c), or 

(ii) a type III supporting organization (as defined in 

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grated type III supporting organization (as defined in 

section 4943(f)(5)(B)), and 

(B) the taxpayer obtains a contemporaneous written acknowledgment (determined under rules similar to the 

rules of paragraph (8)(C)) from the sponsoring organization 

(as so defined) of such donor advised fund that such organization has exclusive legal control over the assets contributed. 

(g) AMOUNTS PAID TO MAINTAIN CERTAIN STUDENTS AS MEMBERS

OF TAXPAYER’S HOUSEHOLD.— (1) IN GENERAL.—Subject to the limitations provided by paragraph (2), amounts paid by the taxpayer to maintain an individual (other than a dependent, as defined in section 152 (determined without regard to subsections (b)(1), (b)(2), and 

(d)(1)(B) thereof), or a relative of the taxpayer) as a member 

of his household during the period that such individual is— 

(A) a member of the taxpayer’s household under a written agreement between the taxpayer and an organization 

described in paragraph (2), (3), or (4) of subsection (c) to 

implement a program of the organization to provide educational opportunities for pupils or students in private 

homes, and 

(B) a full-time pupil or student in the twelfth or any 

lower grade at an educational organization described in 

section 170(b)(1)(A)(ii) located in the United States, shall 

be treated as amounts paid for the use of the organization. 

(2) LIMITATIONS.— (A) AMOUNT.—Paragraph (1) shall apply to amounts 

paid within the taxable year only to the extent that such 

amounts do not exceed $50 multiplied by the number of 

full calendar months during the taxable year which fall 

within the period described in paragraph (1). For purposes 

of the preceding sentence, if 15 or more days of a calendar 

month fall within such period such month shall be considered as a full calendar month. 

(B) COMPENSATION OR REIMBURSEMENT.—Paragraph (1) 

shall not apply to any amount paid by the taxpayer within 

the taxable year if the taxpayer receives any money or 

other property as compensation or reimbursement for 

maintaining the individual in his household during the period described in paragraph (1). 

(3) RELATIVE DEFINED.—For purposes of paragraph (1), the 

term ‘‘relative of the taxpayer’’ means an individual who, with 

respect to the taxpayer, bears any of the relationships described in subparagraphs (A) through (G) of section 152(d)(2). 

(4) NO OTHER AMOUNT ALLOWED AS DEDUCTION.—No deduction shall be allowed under subsection (a) for any amount paid 

by a taxpayer to maintain an individual as a member of his 

household under a program described in paragraph (1)(A) except as provided in this subsection. 

(h) QUALIFIED CONSERVATION CONTRIBUTION.— (1) IN GENERAL.—For purposes of subsection (f)(3)(B)(iii), the 

term ‘‘qualified conservation contribution’’ means a contribution— 

(A) of a qualified real property interest, 


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(B) to a qualified organization, 

(C) exclusively for conservation purposes. 

(2) QUALIFIED REAL PROPERTY INTEREST.—For purposes of 

this subsection, the term ‘‘qualified real property interest’’ 

means any of the following interests in real property: 

(A) the entire interest of the donor other than a qualified 

mineral interest, 

(B) a remainder interest, and 

(C) a restriction (granted in perpetuity) on the use which 

may be made of the real property. 

(3) QUALIFIED ORGANIZATION.—For purposes of paragraph 

(1), the term ‘‘qualified organization’’ means an organization 

which— 

(A) is described in clause (v) or (vi) of subsection 

(b)(1)(A), or 

(B) is described in section 501(c)(3) and— 

(i) meets the requirements of section 509(a)(2), or 

(ii) meets the requirements of section 509(a)(3) and 

is controlled by an organization described in subparagraph (A) or in clause (i) of this subparagraph. 

(4) CONSERVATION PURPOSE DEFINED.— 

(A) IN GENERAL.—For purposes of this subsection, the 

term ‘‘conservation purpose’’ means— 

(i) the preservation of land areas for outdoor recreation by, or the education of, the general public, 

(ii) the protection of a relatively natural habitat of 

fish, wildlife, or plants, or similar ecosystem, 

(iii) the preservation of open space (including farmland and forest land) where such preservation is— 

(I) for the scenic enjoyment of the general public, or 

(II) pursuant to a clearly delineated Federal, 

State, or local governmental conservation policy, 

and will yield a significant public benefit, or 

(iv) the preservation of an historically important 

land area or a certified historic structure. 

(B) SPECIAL RULES WITH RESPECT TO BUILDINGS IN REGISTERED HISTORIC DISTRICTS.—In the case of any contribution of a qualified real property interest which is a restriction with respect to the exterior of a building described in 

subparagraph (C)(ii), such contribution shall not be considered to be exclusively for conservation purposes unless— 

(i) such interest— 

(I) includes a restriction which preserves the entire exterior of the building (including the front, 

sides, rear, and height of the building), and 

(II) prohibits any change in the exterior of the 

building which is inconsistent with the historical 

character of such exterior, 

(ii) the donor and donee enter into a written agreement certifying, under penalty of perjury, that the 

donee— 

(I) is a qualified organization (as defined in 

paragraph (3)) with a purpose of environmental 


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protection, land conservation, open space preservation, or historic preservation, and 

(II) has the resources to manage and enforce the 

restriction and a commitment to do so, and 

(iii) in the case of any contribution made in a taxable year beginning after the date of the enactment of 

this subparagraph, the taxpayer includes with the taxpayer’s return for the taxable year of the contribution— 

(I) a qualified appraisal (within the meaning of 

subsection (f)(11)(E)) of the qualified property interest, 

(II) photographs of the entire exterior of the 

building, and 

(III) a description of all restrictions on the development of the building. 

(C) CERTIFIED HISTORIC STRUCTURE.—For purposes of 

subparagraph (A)(iv), the term ‘‘certified historic structure’’ 

means— 

(i) any building, structure, or land area which is listed in the National Register, or 

(ii) any building which is located in a registered historic district (as defined in section 47(c)(3)(B)) and is 

certified by the Secretary of the Interior to the Secretary as being of historic significance to the district. 

A building, structure, or land area satisfies the preceding sentence if it satisfies such sentence either at the time of the 

transfer or on the due date (including extensions) for filing the 

transferor’s return under this chapter for the taxable year in 

which the transfer is made. 

(5) EXCLUSIVELY FOR CONSERVATION PURPOSES.—For purposes of this subsection— 

(A) CONSERVATION PURPOSE MUST BE PROTECTED.—A 

contribution shall not be treated as exclusively for conservation purposes unless the conservation purpose is protected in perpetuity. 

(B) NO SURFACE MINING PERMITTED.— (i) IN GENERAL.—Except as provided in clause (ii), in 

the case of a contribution of any interest where there 

is a retention of a qualified mineral interest, subparagraph (A) shall not be treated as met if at any time 

there may be extraction or removal of minerals by any 

surface mining method. 

(ii) SPECIAL RULE.—With respect to any contribution 

of property in which the ownership of the surface estate and mineral interests has been and remains separated, subparagraph (A) shall be treated as met if the 

probability of surface mining occurring on such property is so remote as to be negligible. 

(6) QUALIFIED MINERAL INTEREST.—For purposes of this subsection, the term ‘‘qualified mineral interest’’ means— 

(A) subsurface oil, gas, or other minerals, and 

(B) the right to access to such minerals. 

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tion for use of a passenger automobile, the standard mileage rate 

shall be 14 cents per mile. 

(j) DENIAL OF DEDUCTION FOR CERTAIN TRAVEL EXPENSES.—No 

deduction shall be allowed under this section for traveling expenses 

(including amounts expended for meals and lodging) while away 

from home, whether paid directly or by reimbursement, unless 

there is no significant element of personal pleasure, recreation, or 

vacation in such travel. 

(l) TREATMENT OF CERTAIN AMOUNTS PAID TO OR FOR THE BEN- EFIT OF INSTITUTIONS OF HIGHER EDUCATION.— (1) IN GENERAL.—For purposes of this section, 80 percent of 

any amount described in paragraph (2) shall be treated as a 

charitable contribution. 

(2) AMOUNT DESCRIBED.—For purposes of paragraph (1), an 

amount is described in this paragraph if— 

(A) the amount is paid by the taxpayer to or for the benefit of an educational organization— 

(i) which is described in subsection (b)(1)(A)(ii), and 

(ii) which is an institution of higher education (as 

defined in section 3304(f)), and 

(B) such amount would be allowable as a deduction 

under this section but for the fact that the taxpayer receives (directly or indirectly) as a result of paying such 

amount the right to purchase tickets for seating at an athletic event in an athletic stadium of such institution. 

If any portion of a payment is for the purchase of such tickets, 

such portion and the remaining portion (if any) of such payment shall be treated as separate amounts for purposes of this 

subsection. 

(m) CERTAIN DONEE INCOME FROM INTELLECTUAL PROPERTY

TREATED AS AN ADDITIONAL CHARITABLE CONTRIBUTION.— (1) TREATMENT AS ADDITIONAL CONTRIBUTION.—In the case of 

a taxpayer who makes a qualified intellectual property contribution, the deduction allowed under subsection (a) for each 

taxable year of the taxpayer ending on or after the date of such 

contribution shall be increased (subject to the limitations 

under subsection (b)) by the applicable percentage of qualified 

donee income with respect to such contribution which is properly allocable to such year under this subsection. 

(2) REDUCTION IN ADDITIONAL DEDUCTIONS TO EXTENT OF INITIAL DEDUCTION.—With respect to any qualified intellectual 

property contribution, the deduction allowed under subsection 

(a) shall be increased under paragraph (1) only to the extent 

that the aggregate amount of such increases with respect to 

such contribution exceed the amount allowed as a deduction 

under subsection (a) with respect to such contribution determined without regard to this subsection. 

(3) QUALIFIED DONEE INCOME.—For purposes of this subsection, the term ‘‘qualified donee income’’ means any net income received by or accrued to the donee which is properly allocable to the qualified intellectual property. 

(4) ALLOCATION OF QUALIFIED DONEE INCOME TO TAXABLE

YEARS OF DONOR.—For purposes of this subsection, qualified 

donee income shall be treated as properly allocable to a taxable 

year of the donor if such income is received by or accrued to 


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the donee for the taxable year of the donee which ends within 

or with such taxable year of the donor. 

(5) 10-YEAR LIMITATION.—Income shall not be treated as 

properly allocable to qualified intellectual property for purposes of this subsection if such income is received by or accrued to the donee after the 10-year period beginning on the 

date of the contribution of such property. 

(6) BENEFIT LIMITED TO LIFE OF INTELLECTUAL PROPERTY.— Income shall not be treated as properly allocable to qualified 

intellectual property for purposes of this subsection if such income is received by or accrued to the donee after the expiration 

of the legal life of such property. 

(7) APPLICABLE PERCENTAGE.—For purposes of this subsection, the term ‘‘applicable percentage’’ means the percentage 

determined under the following table which corresponds to a 

taxable year of the donor ending on or after the date of the 

qualified intellectual property contribution: 

Taxable Year of Donor Ending on or After Date of Contribution: Applicable Percentage: 

1st................................... 100 

2nd................................... 100 

3rd................................... 90 

4th................................... 80 

5th................................... 70 

6th................................... 60 

7th................................... 50 

8th................................... 40 

9th................................... 30 

10th.................................. 20 

11th.................................. 10 

12th.................................. 10 

(8) QUALIFIED INTELLECTUAL PROPERTY CONTRIBUTION.—For 

purposes of this subsection, the term ‘‘qualified intellectual 

property contribution’’ means any charitable contribution of 

qualified intellectual property— 

(A) the amount of which taken into account under this 

section is reduced by reason of subsection (e)(1), and 

(B) with respect to which the donor informs the donee at 

the time of such contribution that the donor intends to 

treat such contribution as a qualified intellectual property 

contribution for purposes of this subsection and section 

6050L. 

(9) QUALIFIED INTELLECTUAL PROPERTY.—For purposes of 

this subsection, the term ‘‘qualified intellectual property’’ 

means property described in subsection (e)(1)(B)(iii) (other than 

property contributed to or for the use of an organization described in subsection (e)(1)(B)(ii)). 

(10) OTHER SPECIAL RULES.— (A) APPLICATION OF LIMITATIONS ON CHARITABLE CON- TRIBUTIONS.—Any increase under this subsection of the deduction provided under subsection (a) shall be treated for 

purposes of subsection (b) as a deduction which is attributable to a charitable contribution to the donee to which 

such increase relates. 


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(B) NET INCOME DETERMINED BY DONEE.—The net income taken into account under paragraph (3) shall not exceed the amount of such income reported under section 

6050L(b)(1). 

(C) DEDUCTION LIMITED TO 12 TAXABLE YEARS.—Except 

as may be provided under subparagraph (D)(i), this subsection shall not apply with respect to any qualified intellectual property contribution for any taxable year of the 

donor after the 12th taxable year of the donor which ends 

on or after the date of such contribution. 

(D) REGULATIONS.—The Secretary may issue regulations 

or other guidance to carry out the purposes of this subsection, including regulations or guidance— 

(i) modifying the application of this subsection in the 

case of a donor or donee with a short taxable year, and 

(ii) providing for the determination of an amount to 

be treated as net income of the donee which is properly allocable to qualified intellectual property in the 

case of a donee who uses such property to further a 

purpose or function constituting the basis of the 

donee’s exemption under section 501 (or, in the case of 

a governmental unit, any purpose described in section 

170(c)) and does not possess a right to receive any payment from a third party with respect to such property. 

(n) EXPENSES PAID BY CERTAIN WHALING CAPTAINS IN SUPPORT

OF NATIVE ALASKAN SUBSISTENCE WHALING.— (1) IN GENERAL.—In the case of an individual who is recognized by the Alaska Eskimo Whaling Commission as a whaling 

captain charged with the responsibility of maintaining and carrying out sanctioned whaling activities and who engages in 

such activities during the taxable year, the amount described 

in paragraph (2) (to the extent such amount does not exceed 

$10,000 for the taxable year) shall be treated for purposes of 

this section as a charitable contribution. 

(2) AMOUNT DESCRIBED.— (A) IN GENERAL.—The amount described in this paragraph is the aggregate of the reasonable and necessary 

whaling expenses paid by the taxpayer during the taxable 

year in carrying out sanctioned whaling activities. 

(B) WHALING EXPENSES.—For purposes of subparagraph 

(A), the term ‘‘whaling expenses’’ includes expenses for— 

(i) the acquisition and maintenance of whaling 

boats, weapons, and gear used in sanctioned whaling 

activities, 

(ii) the supplying of food for the crew and other provisions for carrying out such activities, and 

(iii) storage and distribution of the catch from such 

activities. 

(3) SANCTIONED WHALING ACTIVITIES.—For purposes of this 

subsection, the term ‘‘sanctioned whaling activities’’ means 

subsistence bowhead whale hunting activities conducted pursuant to the management plan of the Alaska Eskimo Whaling 

Commission. 

(4) SUBSTANTIATION OF EXPENSES.—The Secretary shall issue 

guidance requiring that the taxpayer substantiate the whaling 


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expenses for which a deduction is claimed under this subsection, including by maintaining appropriate written records 

with respect to the time, place, date, amount, and nature of the 

expense, as well as the taxpayer’s eligibility for such deduction, 

and that (to the extent provided by the Secretary) such substantiation be provided as part of the taxpayer’s return of tax. 

(o) SPECIAL RULES FOR FRACTIONAL GIFTS.— (1) DENIAL OF DEDUCTION IN CERTAIN CASES.— (A) IN GENERAL.—No deduction shall be allowed for a 

contribution of an undivided portion of a taxpayer’s entire 

interest in tangible personal property unless all interests 

in the property are held immediately before such contribution by— 

(i) the taxpayer, or 

(ii) the taxpayer and the donee. 

(B) EXCEPTIONS.—The Secretary may, by regulation, provide for exceptions to subparagraph (A) in cases where all 

persons who hold an interest in the property make proportional contributions of an undivided portion of the entire 

interest held by such persons. 

(2) VALUATION OF SUBSEQUENT GIFTS.—In the case of any additional contribution, the fair market value of such contribution shall be determined by using the lesser of— 

(A) the fair market value of the property at the time of 

the initial fractional contribution, or 

(B) the fair market value of the property at the time of 

the additional contribution. 

(3) RECAPTURE OF DEDUCTION IN CERTAIN CASES; ADDITION TO

TAX.— 

(A) RECAPTURE.—The Secretary shall provide for the recapture of the amount of any deduction allowed under this 

section (plus interest) with respect to any contribution of 

an undivided portion of a taxpayer’s entire interest in tangible personal property— 

(i) in any case in which the donor does not contribute all of the remaining interests in such property 

to the donee (or, if such donee is no longer in existence, to any person described in section 170(c)) on or 

before the earlier of— 

(I) the date that is 10 years after the date of the 

initial fractional contribution, or 

(II) the date of the death of the donor, and (ii) 

in any case in which the donee has not, during the 

period beginning on the date of the initial fractional contribution and ending on the date described in clause (i)— 

(I) had substantial physical possession of the 

property, and 

(II) used the property in a use which is related 

to a purpose or function constituting the basis for 

the organizations’ exemption under section 501. 

(B) ADDITION TO TAX.—The tax imposed under this chapter for any taxable year for which there is a recapture 

under subparagraph (A) shall be increased by 10 percent 

of the amount so recaptured. 


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(4) DEFINITIONS.—For purposes of this subsection— 

(A) ADDITIONAL CONTRIBUTION.—The term ‘‘additional 

contribution’’ means any charitable contribution by the 

taxpayer of any interest in property with respect to which 

the taxpayer has previously made an initial fractional contribution. 

(B) INITIAL FRACTIONAL CONTRIBUTION.—The term ‘‘initial fractional contribution’’ means, with respect to any 

taxpayer, the first charitable contribution of an undivided 

portion of the taxpayer’s entire interest in any tangible 

personal property. 

(p) OTHER CROSS REFERENCES.— 

(1) For treatment of certain organizations providing child 

care, see section 501(k). 

(2) For charitable contributions of estates and trusts, see section 642(c). 

(3) For nondeductibility of contributions by common trust 

funds, see section 584. 

(4) For charitable contributions of partners, see section 702. 

(5) For charitable contributions of nonresident aliens, see 

section 873. 

(6) For treatment of gifts for benefit of or use in connection 

with the Naval Academy as gifts to or for use of the United 

States, see section 6973 of title 10, United States Code. 

(7) For treatment of gifts accepted by the Secretary of State, 

the Director of the International Communication Agency, or 

the Director of the United States International Development 

Cooperation Agency, as gifts to or for the use of the United 

States, see section 25 of the State Department Basic Authorities Act of 1956. 

(8) For treatment of gifts of money accepted by the Attorney 

General for credit to the ‘‘Commissary Funds Federal Prisons’’ 

as gifts to or for the use of the United States, see section 4043 

of title 18, United States Code. 

(9) For charitable contributions to or for the use of Indian 

tribal governments (or their subdivisions), see section 7871. 

* * * * * * * 


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(44) 

VII. DISSENTING VIEWS 

The seven bills approved by the Republicans at the markup 

would add more than $93 billion to the deficit—and if history is our 

guide, this is merely the start of the approach the Republicans embraced last Congress. In the 113th Congress, Ways and Means 

Committee Republicans approved $825 billion worth of deficit-financed, permanent tax cuts. The bills marked up by the Committee 

set us down a partisan path, when we should be embracing bipartisanship and working in a responsible, bipartisan manner on tax reform. 

Even though some of these bills were introduced individually 

with some bipartisan support, the opposition to these bills is based 

on the position that these tax provisions should not be made permanent by adding to the deficit without any revenue offset. Our 

nation’s food banks play a vital role in feeding some of America’s 

most vulnerable people, this fact is undeniable. But the approach 

that the Committee Republicans are taking with respect to this 

and other important legislation undermines the bipartisan support 

that the provisions enjoy. The American people expect a tax code 

that maintains and supports our shared priorities, and each time 

the Committee considers these bills in a piecemeal approach, it is 

taking a step in the wrong direction and away from comprehensive 

tax reform. 

We all support the good works of the charitable community and 

strive to provide the resources that encourage taxpayers to make 

decisions that preserve our environment. The markup was not to 

debate the conservation efforts across this country, or the merits of 

H.R. 641, which would make permanent provisions to encourage 

taxpayers to make qualified conservation contributions. 

Finally, we also oppose the manner in which Republicans were 

proceeding—selecting seven provisions to make permanent at a 

cost of nearly $100 billion without any offset from the approximately 60 tax provisions that expired at the end of last year. This 

approach is both fiscally irresponsible and contrary to the goals of 

bipartisan, comprehensive tax reform. 

Expired provisions must be dealt with in a comprehensive manner. The Republicans did not take up other tax extenders that also 

are important to Democratic Committee Members. Left to an uncertain fate are provisions like the Work Opportunity Tax Credit, 

the New Markets Tax Credit, and the renewable energy tax credits, 

as well as the long-term status of the Earned Income Tax Credit, 

the Child Tax Credit, and the American Opportunity Tax Credit. 

SANDER M. LEVIN. 

Æ 


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